Eastwood schools - Board weighs options for financing projects

Eastwood school officials are weighing options for possible financing of improvement projects to district buildings and whether to seek voter approval of financing for a new school building.

The school board in early July approved a resolution to apply for Qualified School Construction Bonds. The QSCB program enables districts to sell bonds for projects that improve the energy efficiency of buildings. The bonds are also available to help finance the construction of new buildings through the Ohio School Facilities Commission (OSFC).

Board members last week discussed various bond financing options with a representative of Fifth Third Bank.

Brent Welker, school superintendent, said the district is eligible to receive an allocation of QSCB – some of which can be issued with an interest rate of one percent or less.

“We can finance the bonds for a maximum of 38 years,“ he said, which would equate to 2.7 mills on a ballot issue.

He said the board could also decide to blend traditional bonds and QSCB, resulting in a ballot issue of somewhere between 2.44 and 2.7 mills.

The district may also have the option of refinancing bonds issued for a high school addition in 1999. Doing so would probably save taxpayers in the final years of collection - 2022 and 2023.

Options available“We are also looking at the timeline for issuing the debt and collection of millage,” Welker said. “We are looking at options that would delay the collection….until February, 2012. Under Ohio law an entity like ours can capitalize interest for up to two years. This would increase the total interest paid, but given the status of the current economy, some may like the fact that this would not be collected until 2012. It would have very little impact on the total millage of the project but may help families who are dealing with unemployment and hardship.”

One thing is certain, he said. The district will see a renewal request on the November ballot for a 1.1-mill permanent improvement levy.

The levy is used primarily to fund building and bus maintenance.

The big question facing the board is whether to seek voter approval of a bond to fund the local share of construction costs for a new elementary building that would house kindergarten through the fifth grade. Bond revenues would be used to leverage funding from the OSFC for construction costs.

If the district proceeded with a bond request to fund a new school, it would also be required by OSFC regulations to include a permanent improvement levy request of 0.75- mill for the project.

If those levies were approved by voters, the school board would direct the Wood County auditor’s office to cease collection on the 1.1-mill permanent improvement levy, Welker said.

The administration projects the district would save about $300,000 annually in operating costs by constructing a new K-5 school at the central campus.